Blasting the Budget

If it’s broke – fix it.

The Nutmeg State is bankrupt, according to the Connecticut Association of Certified Public Accountants. As such it faces the most serious fiscal crisis since its founding more than 350 years ago, said state Sen. L. Scott Frantz  (R-36).

“They said ‘we are broke, anyway you look at it, we are broke,” Frantz told the more than 30 people attending last night’s budget forum at the Greenwich Senior/Arts Center. It’s unclear whether the state has two days of operating cash or two months of operating cash. Either way, the long-term prognosis is poor if the problem isn’t treated, he said.

State Reps. Lile Gibbons (R-150), Livvy Floren (R-149), and Fred Camillo (R-151) joined Frantz. The four called for a mix of mandating relief and privatization to fix the problem.

The state’s $3.5 billion budget short must be closed, in that both Democrats and Republicans agree.

How to fix the problem is a point of contention. The Democrats recently agreed on a budget that relies on $2 billion in concessions from state employees, plus a mix of new tax increases. The Republicans proposed a budget that also relies on state employee concessions, but keeps funding for municipalities at current levels and doesn’t add new taxes.

While Gov. Dannel P. Malloy’s proposed budget reportedly cuts spending, the reality is spending would continue to grow, said Floren. And, she added, the Democrats agreed to increase spending by a half-billion dollars in FY12 and another half-billion dollars in FY 13.

“My colleague Lile Gibbons will tell you how we’re going to close this gap, and it’s called magic,” Floren said.

The magic referred to is the bet that the state employees will make $2 billion in concessions. But that’s the big unknown.

“We don’t know what those concessions are going to be,” Gibbons said.

The Republicans want state employees to pay higher co-pays for medical visits. They also want to eliminate longevity payments, a bonus for time served on the job. Malloy also supports reducing or eliminating longevity payments.

The four delegates also called for Malloy to consolidate 35 state agencies into 9, and eliminate 383 government positions. That would save $18.9 million in FY12 and $27.6 million in FY13, according to the delegates. Also, the state needs to eliminate vacant positions, which could bring a savings of $10.8 million during FY 12 and FY13.

The major bone of contention for Republicans is the governor’s proposed tax increases. Under his plan income taxes will rise, with the top-bracket rising perhaps as high as 7 percent. Sales taxes will increase to 6.5 percent and gas and diesel tax will rise to 28 cents a gallon.

Under this plan, a hypothetical family earning $120,00 with two children, will see their personal income rate increase $220, a reduction of the property tax from $500 to $350, Or, a total tax increase about $1,090, Gibbons said.

“They are probably spending almost everything they take in,” Gibbons said.

There is another way, with no new tax increases, Camillo said.

“Gov. Andrew Cuomo has done that in New York and his poll ratings are reaching 80 percent,” Camillo said.

Taxes clearly weighed on people’s minds.  Monique Thomas who ran as an Independent in a special election for the 148th House District said she went door-to-door with a petition calling for new no tax increases. Thomas attributed her loss to voter complacency and the domination of Democrats.

“They’re clinging to the D’s after their names or whatever it is, and the wool over their eyes,” Thomas said. “They’re just registered because that’s the way they’ve just registered. They don’t realize what they’re doing.”

The GOP proposal also suggests what it calls mandated relief. That includes limiting unemployment benefits for part-time workers, an option to raise the cap on municipal fines to $250, optional delay of conservation and development plans, optional delay of revaluation, delaying in-school suspension requirements, raising the threshold for prevailing wage requirements, and binding arbitration reform.

In addition, the Republican caucus wants increased privatization for many services, including Department of Motor Vehicles, Department of Environmental Protection parks maintenance, and Department of Corrections prisoner health care.

“You’ll see a pretty dismal picture going forward,” Frantz said. “There is a way out of this. It requires action; action which is very doable, but needs to be done quickly. We can get this state out of this fiscal quagmire … if we do everything right.”